How mStable Works

The building blocks behind mStable tokens and how they work together.

Core Stack

mStable combines several proven DeFi layers into a single, automated token experience:

• Base layer – Ethena (sUSDe): A yield-bearing stablecoin, forming the foundation of each product.

• Yield layer – Pendle PTs: Principal Tokens (PTs) from Pendle lock in a fixed return until expiry.

• Amplification – Aave looping: Collateral is looped (deposit → borrow → redeposit) to increase exposure.

• Automation – Bots + dHEDGE contracts:

  • Bots secure Aave borrow capacity.

  • Rollovers happen automatically as PTs near expiry.

  • Health factor and risk limits are managed in real-time.

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Token Output

The result is an ERC20 token (like mPT-sUSDe) that:

• Represents a position in this yield strategy.

• Appreciates in value as yield is realized.

• Requires no manual management.

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Key Features

• Fixed yield component: PTs lock in rates until expiry.

• Amplified exposure: Aave looping boosts performance.

• Automated rollovers: Expired PTs are reinvested seamlessly.

• ERC20 simplicity: Tradable, composable, and portable across DeFi.

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